A policyholder had a laundry list of property repairs and replacements to make following a storm. Included in the contractor estimate were three recommended full HVAC system replacements for hail and lightning damage and a comment containing R-22 misinformation. The adjuster contacted HVACi’s experts to verify cause of loss and ensure only necessary replacements were made.
Fill out the form to receive your copy of this residential lightning claim case study that outlines the loss details, what HVACi’s testing revealed, and how we recommended the claim be settled.
The Investigating Lightning and Surge HVAC Claims Webinar has already occurred. You can watch the recording here.
Nearly a quarter of the HVAC systems that HVACi assessed last year had lightning or surge as the reported cause of loss because this equipment is particularly susceptible to these perils. The Investigating Lightning and Surge HVAC Claims Webinar provides adjuster information about how to handle these claims more accurately and better tell the difference between damages caused by direct lightning, surge, and wear and tear.
Through this webinar, adjusters will:
Understand the essentials of lightning and high voltage surge damage in property claims
Identify specific HVAC components that are susceptible to these perils
Compare differences between HVAC system damages caused by direct lightning, high voltage surge, and wear and tear
Examine real-life scenarios that demonstrate what to look for when handling these claims
Important: Pre-recorded webinars do not qualify for CE credit.
You’ve probably looked at hundreds of claims over your career and can notice when repair or replacement estimates seem higher than usual – even if you aren’t sure what they should be. That’s what happened after this claim was filed for damage sustained following Hurricane Irma.
In this edition of Scary Story, replacement cost estimates from the insured’s contractor seemed to be more expensive that what was in line with market value, and the adjuster wasn’t sure the damage was even caused by a covered peril. Fill out the form to find out if the adjuster’s suspicions were correct and how an objective third-party partner can help carriers make more accurate claim settlements.
The severity and amount of activity during hurricane season continues to break records with increases in the number of named storms and hurricanes making landfall. Having both indoor and outdoor equipment, HVAC systems are often in harm’s way and are prone to damages that will wind up in claims. Know what to expect and the best methods for handling these claims with HVACi’s eBook, “Catastrophe Claim Preparation: Tips for Hurricane-Related Claims with HVAC Systems.”
Adjusters like you can better understand how hurricane-related perils, including wind, water, and lightning or surges, impact HVAC systems and some approaches to return them to pre-loss condition. You can also review actual HVAC claim damage assessment results from some major U.S. hurricanes, including hurricanes Harvey, Irma, and Matthew.
Fill out the form to also discover the prevalence of hurricane-related HVAC system claims that have equipment that is non-damaged or damaged by a non-covered peril to prevent that from happening to your carrier.
Policyholders may not know what caused the damage to their equipment – and they don’t have to. The insured in this case study didn’t know why the commercial walk-freezer wasn’t working, and the contractor only advised that repairs weren’t possible. Even under these circumstances, adjusters can still make a confident and accurate claim settlement decision by seeking the support of an objective third party expert who can determine cause of loss and scope of damage.
Fill out the form to read HVACi’s recommendations for how to settle the claim and return the insured’s property to pre-loss condition – no replacement necessary.
The Handling Complex Residential and Commercial HVAC Claims Webinar has already occurred. You can watch the recording here.
Can you name 5 different types of HVAC systems? Split systems and package units probably come to mind, but what about some of the less common ones? It’s important adjusters have a basic grasp of the uses of less traditional complex systems in order to better settle claims with them.
HVACi’s webinar, Handling Complex Residential and Commercial HVAC Claims, provides the foundation of what to know about these HVAC systems and equipment, including evaporative coolers, geothermal systems, economizers, make-up air units, refrigeration equipment, and chillers. Better understand how they work, ways they get damaged, and why they may be the preferred choice for some of your commercial and residential policyholders.
The webinar includes:
The significance of complex residential and commercial HVAC claims
Identification of less familiar types of HVAC systems, including chillers, evaporative coolers, geothermal systems, and more
Common damages for each system type
Real-life claim scenarios of less common systems and their outcomes
Important: Pre-recorded webinars do not qualify for CE credit.
Chillers, Coolers, Refrigeration Systems – these words all sound as though the equipment should function in similar ways. However, their components and processes are much different, making it essential they aren’t treated the same way when they appear in claims.
Fill out the form to receive your one-page guide with 5 key facts to know about 5 complex HVAC systems likely to appear in property & casualty claims. You don’t have to be an expert on how these systems work (leave that to us), but with this guide, you’ll get a basic understanding of how and why your policyholders use evaporative coolers, geothermal systems, chillers, exhaust fans, and refrigeration systems. You’ll also learn their primary causes of loss and what percentage of systems were determined to be in proper working condition or could be repaired following our assessment.
Most commercial policyholders use package units and split systems; however, other types of HVAC systems are prevalent in claims. Among them are exhaust fans, chillers, and make-up air units. It’s important adjusters know a little about each type of HVAC system – even less common ones – to ensure the most accurate settlement decisions.
Exhaust Fans
According to the CCG IQ 2020 Annual Report, exhaust fans were the third most frequently claimed system type. They are found in commercial kitchens, offices, manufacturing, and warehouse buildings and are used to remove stale air, cooking odors, and excessive moisture or heat. Among their advantages are ventilating a space to provide fresh air, improving air quality for a healthier atmosphere indoors, and removing moisture to prevent mold growth.
Exhaust fans operate by a motor turning either fan blades or a blower wheel, depending on the type, to pull contaminated air out of the building. Belt driven units rely on a belt to connect the fan or blower to the motor. In a direct drive unit, the motor is connected to the fan blades or blower wheel by a shaft or axle, and the blades rotate with the motor.
Downblast exhaust fans, left, are best for applications unrelated to cooking; whereas, upblast exhaust fans trap grease remnants left in the air so they don’t cause damages to equipment or the roof.
Policyholders may use an upblast or downblast exhaust fan, depending on their needs. Upblast exhaust fans are ideal for spaces with commercial kitchens, including restaurants or hotels. Air is blown out of the top, and, more importantly, a sealed compartment protects the motor from the heat, moisture, and contaminants being removed. Additionally, a secondary grease trap captures condensed grease to prevent it from getting onto the roof.
In contrast, downblast exhaust fans should never be used for kitchens or in places where contaminated air has grease. Downblast fans eject the air down toward the fan base and roof, which protects the motor from precipitation but could be a fire hazard if grease accumulated there. Downblast exhaust fans should be used to remove heat, stale air, and odors.
Among the predominant causes of loss are hail, wind, and smoke and fire; however, almost a third of the exhaust fan systems were in proper working condition at the time of assessment.
Chillers
Chillers are commonly used in airports, hospitals, hotels, shopping malls, restaurants, temporary structures, and industrial or medical facilities. They transfer heat out of a space using water or a water solution instead of air. Policyholders may have water-cooled or air-cooled chillers; however, the initial process is the same.
Warm water enters the evaporator unit from the primary return coming from the building’s Air Handler Units (AHUs) and its heat is transferred to the refrigerant. The now cooler water is then pumped by a water pump through the primary supply back to the AHU. A blower and the ductwork bring in air from the facility, and the water absorbs its heat. The now cooler air is supplied back to the conditioned space through the ductwork. This process is similar to that of a traditional HVAC split system or package unit. The warmer water then returns to the evaporator to restart the process.
The processes for how water-cooled and air-cooled chillers work are almost identical except for the method used to transfer heat from the refrigerant.
The difference between air-cooled and water-cooled chillers is how the refrigerant transfers out the heat it absorbed from the water. Refrigerant moves from the evaporator to the compressor, which increases the refrigerant’s pressure and temperature, and then it goes to the condenser. In water-cooled chillers, water surrounds the refrigerant pipes to absorb the heat and then is pumped into a cooling tower to release the heat. Meanwhile refrigerant goes through the expansion valve to reduce its pressure and temperature and restart the process. In air-cooled chillers, fans bring outside air through the condenser, which absorbs heat from the refrigerant, and expels it to the ambient air – much the same as the process for traditional split systems and package units.
Despite the complex processes, chillers may be preferred over traditional split systems and package units because water conducts heat 25 times better than air. Each chiller type also has advantages. Water-cooled chillers are better at conducting heat, are more consistent, and are best for medium to large facilities, though they require a stable water supply and a lot more maintenance. Air-cooled chillers, which are better for small to medium facilities, have lower installation costs, less maintenance, and require less space.
Among the perils affecting chillers are corrosion and poor maintenance, which are linked with wear and tear, as well as electrical problems caused by wear and tear or high voltage surges.
Make-Up Air Units
Make-up air units aren’t claimed as often; however, when they are, make-up air units are frequently determined to be non-damaged, making damage assessment essential. As the name implies, make-up air units compensate for air that was removed through process exhaust fans or other mechanical means. While exhaust fans draw air out of a facility to the outside, make-up air units reclaim fresh air from outside to bring it into the building. However, unlike ventilation fans that bring in outside air without changing its temperature, make-up air units can temper air so the heating or cooling system won’t have to work harder or waste energy.
Make-up air units provide tempered fresh air into spaces that have a lot of mechanical ventilation taking air out.
Make-up air units are typically used in industrial or other similar commercial applications, such as restaurants, warehouses, or distribution centers. These are areas where more ventilation is required to improve air quality and protect health. If too much air has been exhausted by mechanical means and isn’t replaced, the space can become depressurized. Having a make-up air unit deliver fresh air can restore the pressure and balance and contribute to the overall Indoor Air Quality, which may be part of a local, state, or federal regulation.
Types of make-up air units include direct gas-fired, indirect gas-fired, and non-gas fired. Direct fired units heat outdoor air directly through combustion of natural gas by an air burner. Indirect gas-fired make-up air units have combustion products discharged through a flue rather than within the supplied air. Non-gas fired options use electric, hot water, or steam heat as an alternative to gas.
Predominant causes of loss for make-up air units are hail, wind, and high voltage surge. Make-up air units are most frequently included on hail claims if they are on the roof. But since they don’t have any coils and have strong metal cases, they typically aren’t damaged by hail. Adjusters should make sure they aren’t settling for non-damaged equipment.
Consider Expert Assessment Before Settling a Claim
Due to the complexity of commercial HVAC systems, carriers can benefit from expert evaluations. HVACi is the nation’s leading provider of HVAC and Refrigeration damage assessment services for insurance carriers. Our team uses its HVAC system knowledge and experience to enable adjusters and insurance personnel to confidently settle claims based on data-driven testing, actionable reports, and prompt cycle times.
Dealing with a claim that has an HVAC system you aren’t familiar with? Submit a claim to receive cause of loss, scope of damage, and repair and replacement recommendations to return your policyholder’s system to pre-loss condition quickly and fairly.
Snow and ice from Winter Storm Uri caused widespread damage, power outages, and other repercussions throughout Texas – but it is not the only cause of loss for damaged equipment. Photo Credit: “Snow Covered Bare Trees” by Haojie Xu / CC BY 4.0
HVACi has completed thousands of equipment evaluations for HVAC systems in Texas that all began to fail around then. While many have signs of damage or aren’t functioning as designed, comprehensive testing based on engineering best practices has led to cause of loss determinations that differ from what many insureds – and their contractors – expect them to be. Before settling another claim where an insured has stated their system failed because of freezing conditions or frozen refrigerant, insurance professionals should better understand why that may not be accurate and requires verification.
Know the Freezing Point of Refrigerant
Refrigerant is the lifeline of most HVAC systems. It’s used to absorb heat during the process to condition air to be a more desirable temperature in a home or business. Refrigerant comes in synthetic forms, including Chlorofluorocarbons or Hydrochlorofluorocarbons, and natural forms, such as Hydrocarbons and Carbon Dioxide. Among the elements used in many of these are Carbon, Fluorine, Hydrogen, and Chlorine. Consequently, refrigerant’s freezing point is well below that of an unexpected winter storm in Texas – or Antarctica.
Snow and ice may cover a condensing unit outside, but the refrigerant inside of it won’t freeze causing leaks in the copper tubing, as some policyholders claimed. Photo Credit: “Air Conditioner” 17046710 / CC BY 4.0
It’s evident that freezing temperatures in Texas, or elsewhere in the United States, don’t cause refrigerant to freeze, expand copper tubing, and leak out. These kinds of failures are more likely to stem from wear and tear and occur over time.
Heat pumps are most effective in temperate climates where they do not need additional heating sources.
Heat pumps work best in temperate climates, and policyholders in Southern states may prefer them. However, extreme heat or cold can be problematic for these systems.
Heat pumps primarily rely on compressed refrigerant and then electric heat strips. Calculating an HVAC system’s Delta T, the difference between the return air temperature and supply air temperature, determines the temperature split a system can produce. Heat pumps typically are capable of a 20- to 30-degree temperature split – i.e., if it’s 40 degrees outside, the HVAC heat pump has little trouble maintaining a 70-degree indoor temperature.
The temperatures in Dallas, Texas, from Feb. 14-17 never went above freezing – ranging from 14-29 degrees Fahrenheit. Policyholders trying to keep their homes and businesses heated may have caused the Delta T to be larger than a heat pump is designed for, which could have put excessive strain to the system.
Heat pumps have a lifespan of 15 years under typical circumstances. To make up for the larger Delta T, they would have run longer without their required downtime that ensures longevity. Freezing conditions caused heat pumps to work harder, but the resulting overheating and failures would have directly come from the intensified wear and tear, particularly if signs of usage damage were already present. An expert assessment will confirm whether the damage was a repercussion of overuse and not freezing conditions.
Distinguish Wear and Tear, High Voltage Surge, and Freezing
Freezing and high voltage surge were frequently claimed perils after the winter storm, but definitive testing would verify them as cause of loss.
A heat pump’s electrical components, refrigerants, and motors aren’t affected by colder temperatures and wouldn’t be physically harmed. Prolonged operation causes wear and tear to compressors and heat strips, but motors within the heat pump system, including the fan motor and blower motor, can handle it. On the other hand, failures to commercial boilers and chiller water coils as well as residential water heaters were prevalent due to the freezing conditions in Texas.
Fan motors inside a heat pump typically wouldn’t be affected by colder temperatures and wouldn’t be physically harmed.
Power outages were widespread after the Texas storm, and high voltage surges could have impacted HVAC systems once electricity was restored. High voltage surge was the cause of loss for 11% of HVAC systems assessed last year, according to the CCG IQ 2020 Annual Report. Equipment testing would prove if a surge caused the damage, which would be more limited to electrical components.
Another critical aspect to consider is how much of the system sustained damage. When freezing or high voltage surge are the direct cause of loss, HVAC damage is more widespread and could require major repairs or replacements. However, when these perils are indirect causes, the damage is typically limited to single-component failures that may only need a repair to return the policyholder to pre-loss condition.
HVAC Damage Assessments Remove Doubt
Catastrophe claims vary in size and severity. It’s essential adjusters rely on expert support to verify cause of loss and ensure a carrier isn’t settling a claim with equipment in properly working order or for components that were damaged by a non-covered peril. It’s also critical adjusters have access to manufacturer-direct research to certify policyholders can obtain the needed components to easily return to pre-loss condition at market value costs.
HVACi delivers expert onsite damage assessments and desktop reviews, regardless of if the loss stems from a catastrophe or a minor event. Adjusters trust HVACi to provide objective, actionable, and comprehensive reports with enough information to make settlement decisions quickly, confidently, and accurately. Submit a claim to determine cause of loss, most appropriate repair and replacement options, and market value pricing.
Downblast exhaust fans, left, are best for applications unrelated to cooking; whereas, upblast exhaust fans trap grease remnants left in the air so they don’t cause damages to equipment or the roof.
The processes for how water-cooled and air-cooled chillers work are almost identical except for the method used to transfer heat from the refrigerant. 
Make-up air units provide tempered fresh air into spaces that have a lot of mechanical ventilation taking air out.
Snow and ice from Winter Storm Uri caused widespread damage, power outages, and other repercussions throughout Texas – but it is not the only cause of loss for damaged equipment. Photo Credit: “Snow Covered Bare Trees” by Haojie Xu / CC BY 4.0
Snow and ice may cover a condensing unit outside, but the refrigerant inside of it won’t freeze causing leaks in the copper tubing, as some policyholders claimed. Photo Credit: “Air Conditioner” 17046710 / CC BY 4.0
Heat pumps are most effective in temperate climates where they do not need additional heating sources.
Fan motors inside a heat pump typically wouldn’t be affected by colder temperatures and wouldn’t be physically harmed.